So first let to know what is future trading how to differ from spot or simple trading.
“The future trading is a contract based trading. Where a parties are agree to buy and sell a cryptocurrency at a specific date and time in future”.
Once a future contract has been agreed, then the parties must carry all the predetermined price. And It will be different from other trading ways like spot trading. In future you have to take a position in ongoing contract like Long or Short position as per market trendline. There is no expire date of this contract so you can take a position in indefinite time but take at your own risk.
So let’s know how to trade in future on binance.
1. First you have to open or “Login” in your binance account. If you don’t have an account on binance there are few steps.
* Click on the “Register“ button at the top to register.
* Enter your email id and create a safe password after this you should receive a verification email on your mail. Now you have to follow the instructions which is given in the email to complete your binance account.
2. After this you have to click on “derivatives” and after click on this you have to click on “futures” option.
3. Now click on the ” open now ” button to activate your account.
4. Then you have to transfer your USDT or BTC balance from spot to futures account now you are ready to start trading.
5. You have to start trading with “USDT-Margined Futures” in this section there are lots of coins with different leverage levels.so you have to select the coin and take the Long or Short Position as per the market Trend line.
In future trading you have to know about some points which is very important to know about these points.
Take Long position : when you want to take a long position first you to book a order and click long. In long position if the market goes high you have a profit if market goes down then you have to take loss in the tarde.
Take short position : when you want to take a short position first you have to book a order and click short. In short position if the market goes down from your price you have a profit if market goes high from your price then you have to take loss in the tarde.
There are different types of method to put the orders in the trade.
Limit Order : Limit orders are orders you have to place the order on the order book with a specific price. When you place a limit order, the trade would get executed only when the market price reach the price only.
Market Price : Next option is the market order. Market orders are considered the most basic order. In this the orders are executed to buy or sell at the best current price.
Stop Limit Order : You have to put the stop limit in the trade the. When it comes to the stop limit order, the stop price, the price at which an order a become proceed and confirm order when the price is reached. In this you have to choose the prices like “Mark Price” or “Last Price”. I prefer you always choose the Last Price for stop Limit.
Stop market order : Stop market order is similarly as stop Limit Order but in this you have to close your order at the current market price.
Take Profit: Always use ‘Take Profit’ in your every trade. lets see how you use it when you place an order in futures you always put a stop loss, then after execute the order see where your trade is going if it is in profit but little far from your desired target now this time you have to use the ‘take profit’. Actually take profit is nothing but the method to move ‘stop market price’ above to our place order price. It always give’s you a profit in every ‘LONG and SHORT’ trade if the market is suddenly fall down.
Trailing Stop Order : Trailing stop order is little more complicated than the rest of the other order types. A trailing stop order essentially makes sure that you have gain profits while also minimizing the probable losses you might suffer on your currently open positions.
Last Price : The Last Price is easy to understand. It means the Last Price that the contract was traded at. In other words, the last trade in the trading history defines the Last Price.
Mark Price : The Mark Price is designed to prevent price manipulation. Actually it is calculated price using a combination of funding data and the price data from multiple spot exchanges. The mark price is use by the exchange to calculated the liquidation price and unreleased PNL of your order.
You can find the calculator at the top of the order entry field. It allows you to calculate values of your trade or your order
PNL : Use this tab to calculate your Initial Margin, Profit and Loss (PnL), and Return on Equity (ROE) which is based on entry price, your invested amount and your leverage.
Target Price : We Use this tab to calculate what price we will need to exit our position at to reach our desired position.
Liquidation Price : Use this tab to calculate our liquidation price based on your wallet balance, which is based on our entry price, leverage and our position.
There are two types of modes to take position one is “One Way Mode” which is the default mode in trade.
In one way mode you have only take one position at the time which is means that you can take only Long or Short position that time in this you can’t take both long and short position at the same time.
Hedge Mode : In this mode you can take both Long and Short position at the same time.
Funding Rate : Funding rates are periodic payments either to traders that are Long or Short based on the difference between perpetual contract markets and sot prices. And depending on open positions, trader will either pay or receive funding.
Crypto funding rates prevent lasting divergence in the price of both markets. It is a recalculated several times a day, in Binance Futures does this every eight hours.
In Futures trading you have two margin modes
1. Isolated Margin : When we choose the Isolated Margin option in the trade it will use only your preferred or invested amount in the trade not your full portfolio amount in the trade to maintain your trade or liquidation.
2.Cross Margin : The cross margin is little bit different from isolated margin. When we choose cross margin to do a trade it will be use to your whole future amount to maintain a liquidation point in the trade.
So you have a choice to choose a margin mode as your own risk.
Leverage : In future trading option every coin has a different leverage you have to choose how much you want to take a leverage level in your trade. Actually leverage means It’s worth noting that the larger the position size is, the smaller the amount of leverage is that you can use. Similarly, the smaller the position size, the larger the leverage you can use.
But remember Higher leverage higher risk.
So in this post we will try our best to tell you how to trade in futures on binance if we forgot something which is very important to you then tell us
Best of Luck for your trading.
Happy Trading Guys…
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